Recurrent trade agreements and the value of external enforcement

• 成果类型: Article
• 署名作者: Klimenko, Mikhail; Ramey, Garey; Watson, Joel
• 署名单位: University System of Georgia; Georgia Institute of Technology; University of California System; University of California San Diego; University of California System; University of California San Diego
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2007.07.004
• 发表日期: 2008
• 页码: 475-499
• 关键词: TRADE AGREEMENTS; WTO; CONTRACTS; RENEGOTIATION; ENFORCEMENT

摘要

This paper presents a theory of dynamic trade agreements in which external institutions, such as the WTO, play a central role in supporting credible enforcement. In our model, countries engage in ongoing negotiations, and, as a consequence, cooperative agreements become unsustainable in the absence of external enforcement institutions. By using mechanisms such as delays in dispute resolution and direct penalties, enforcement institutions can restore incentives for cooperation, despite the lack of coercive power. The occurrence of costly trade disputes, and the feasibility of mechanisms such as escape clauses, depend on the degree to which enforcement institutions can verify, and condition on, events that may lead to trade disputes. (c) 2007 Elsevier B.V. All rights reserved.